No Joy for Yahoo! - TheStreet

No Joy for Yahoo!

Shares slide after the Internet giant guides full-year revenue lower.
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Updated from July 17

Yahoo!

(YHOO)

fell in early Wednesday trading, after the company guided lower for third-quarter and full-year revenue despite hitting analysts' second-quarter earnings expectations.

Shares of Yahoo! recently slumped $1.32, or 4.8% to $26.21.

In a conference call for investors late Tuesday, newly appointed CEO and co-founder Jerry Yang said that he would take the next 100 days to review the company's strategy.

"We have a great sense of urgency, and I feel this is the most important transformation in Yahoo!'s history," Yang said. And while he has only been CEO since June, Yang added that "I co-founded this company and have been thinking about our place in the market for 13 years."

Yang also said the company plans to invest heavily in technology-oriented aspects of its business, while at the same time looking to cut back in areas it does not see as key

"Make no mistake, we are in investment mode," Yang said. "There needs to be a greater emphasis on technology and a focus on developing differentiated products for us to succeed," he said.

Yang said the themes of "insights, openness, and being a trusted partner" would help define the strategy the company pursues.

Sue Decker, who was appointed president in June, said the company will also continue to hone its organizational structure. A reorganization along new business divisions that Yahoo! first announced in December will continue to be refined.

Decker also said the many open positions -- and recent departures -- among Yahoo!'s management ranks presented the company with an opportunity. Over the last quarter, the company saw the sudden departure of its chief technical and sales officers.

But Decker said the new vacancies would allow the company to hire executives that were more aligned with the company's future direction.

The company also said it would continue to hire aggressively, particularly in its search team.

For the quarter ended June 30, the Internet portal giant said that revenue was essentially flat, falling to $160.6 million, or 11 cents a share, from $164.3 million, or 11 cents a share, a year earlier.

Revenue rose 8% to $1.7 billion. Excluding traffic acquisition costs, revenue came in at $1.24 billion.

Analysts surveyed by Thomson Financial/First Call had expected the company to earn 11 cents a share on revenue excluding traffic costs of $1.24 billion.

For the third quarter, the company said it expects revenue minus traffic costs of $1.17 billion and $1.31 billion, below previous guidance of $1.2 billion to $1.3 billion.

Analysts had expected revenue of $1.29 billion.

For the full year, Yahoo! said it expects revenue excluding costs of between $4.89 billion and $5.19 billion.

Analysts had expected $5.18 billion.